We justify risk neutral equilibrium bidding in commonly known fair division games with incompleteinformation by an evolutionary setup postulating (i) minimal common knowledge, (ii) optimal responses to conjectural beliefs how others behave and (iii) evolutionary selection of conjectural beliefs...

The ultimatum game is a sequential-move bargaining game in which a “giver” offers a “taker” a share of a monetary pie. The predicted subgame perfect equilibrium is for rational givers to offer the smallest possible share, and for rational takers to accept. Experimental trials conducted...

We conduct an experiment in which subjects play an ultimatum game but, rather than bargaining over money, they bargain over lottery tickets for a prize. Compared to the standard ultimatum game, proposers offer a significantly lower percentage of lottery tickets, which is inconsistent with either...

Using an approach based on evolution and adaptation, we provide foundations for a model of choice under uncertainty based on adaptive preferences, and we show that updating of those preferences in response to new information will respect dynamic consistency even at the cost of violating...